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Quality Control Review of the Independent Auditor’s Report on the Federal Aviation Administration’s Audited Consolidated Financial Statements for Fiscal Years 2019 and 2018

Required by the Chief Financial Officers Act of 1990
Project ID: 
QC2020009
What We Looked At
We contracted with the independent public accounting firm KPMG LLP to audit the Federal Aviation Administration’s (FAA) financial statements as of and for the fiscal years ended September 30, 2019, and September 30, 2018, and to report on internal control over financial reporting and compliance with laws and other matters. The contract requires the audit to be performed in accordance with U.S. generally accepted Government auditing standards, Office of Management and Budget audit guidance, and the Governmental Accountability Office’s and Council of the Inspectors General on Integrity and Efficiency’s Financial Audit Manual. In connection with the contract, we performed a quality control review of KPMG’s report dated November 9, 2019, and related documentation, and inquired of its representatives.
 
What We Found
Our quality control review disclosed no instances in which KPMG did not comply, in all material respects, with U.S. generally accepted Government auditing standards.
 
Recommendations
FAA concurred with KPMG’s seven recommendations. We agree with KPMG’s recommendations and are not making any additional recommendations.

Recommendations

Open

Closed

No. 1 to FAA

KPMG recommends that Management design and implement procedures to consistently perform and document the following, as required by existing internal policies: Application log reviews.

No. 2 to FAA

KPMG recommends that Management design and implement procedures to consistently perform and document the following, as required by existing internal policies: Database layer audit log reviews.

No. 3 to FAA

KPMG recommends that Management design and implement procedures to consistently perform and document the following, as required by existing internal policies: Operating System layer log reviews.

No. 4 to FAA

KPMG recommends that Management design and implement procedures to consistently perform and document the following, as required by existing internal policies: Application level user account access reviews.

No. 5 to FAA

KPMG recommends that Management design and implement procedures to consistently perform and document the following, as required by existing internal policies: Operating system administrative account access reviews.

No. 6 to FAA

KPMG recommends that management design and implement review and approval control activities specific to the setup of a new donated inventory part in LCSS to ensure the established unit cost and related attributes are based on supportable and accurate information.

No. 7 to FAA

KPMG recommends that management r edesign policies and procedures unique to LCSS and the receipting scenarios that are acceptable for the MISC and F&E purchase order receipt process which support the accuracy of inputs. Further, management should design and implement review and approval control activities surrounding the creation of MISC and F&E purchase orders in LCSS to ensure the unit cost and other attributes which are critical for the appropriate valuation, are valid and accurate.